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Hopes for the legalization of online casinos in Maryland have dimmed for the near future. Despite earlier optimism from gaming advocates and some lawmakers, Governor Wes Moore’s latest budget framework for 2025 has made it clear: Maryland is not ready to roll the dice on iGaming just yet.
Faced with a looming $3.3 billion state deficit, the governor and legislative leaders are focusing on more immediate, politically viable revenue strategies — including a higher tax rate on regulated sports betting operators.
Maryland’s Online Casino Bill Loses Momentum
For the last several months, momentum had been building around bills introduced in both chambers of the Maryland General Assembly to regulate real-money online casinos. Sponsored by Delegate Vanessa Atterbeary and Senator Ron Watson, these proposals gained some traction in committee discussions. However, as the legislative session progressed and budget concerns took center stage, iGaming legislation in Maryland quickly lost priority.
Instead of advancing a new regulatory framework for online casinos, Maryland opted to tweak existing gaming policies. One key update: Governor Moore’s budget plan proposes increasing the tax rate on sports betting revenue from 15% to 20% — a move expected to raise $32 million annually.
In contrast, a separate proposal to increase the tax on table games at land-based casinos from 20% to 25% was ultimately rejected, reflecting selective adjustments within the state’s broader gaming ecosystem.
Unregulated Sweepstakes Casinos Spark Legislative Action
Even though iCasino efforts stalled, lawmakers have been zeroing in on another pressing issue: the rise of unlicensed sweepstakes casinos operating across Maryland.
These online platforms operate in a regulatory grey area and are often marketed as “free-to-play” or “promotional sweepstakes,” yet they offer real-money casino-style gaming without any state oversight or licensing. Legislators say these platforms not only bypass state regulation but may also account for up to $6 billion in untaxed gambling activity nationwide.
To confront the issue, the Maryland Lottery and Gaming Control Commission issued a cease-and-desist order to VGW, a leading operator of sweepstakes-style gaming. The letter demanded details on their product offerings and a legal rationale explaining how they operate within state boundaries without regulatory approval.
The move follows mounting pressure from state legislators who believe the unchecked growth of these platforms undermines consumer protections in Maryland’s gaming market.
Proposed Ban on Sweepstakes Casinos Faces Pushback
Maryland lawmakers introduced legislation to ban online sweepstakes casinos statewide, with the Senate advancing SB 860 earlier this month. The bill seeks to shut down unregulated gaming operations and protect residents from misleading or harmful gaming experiences.
However, the House version, HB 1140, stalled in the Ways and Means Committee and failed to reach a vote. Opponents, including lobbying groups like the Social and Promotional Games Association (SPGA), argue that these platforms offer a legal, fun alternative to traditional gambling and should not be targeted without further study.
Sports Betting Tax Increase Gains Support
While online casinos in Maryland are off the table, the sports betting industry is under tighter scrutiny. Governor Moore’s administration followed the path of states like New York and Ohio by implementing a sports betting tax increase, jumping from 15% to 20%.
The original proposal had aimed even higher — with a 30% rate floated during early budget discussions — but the final compromise reflects a middle ground that avoids overwhelming licensed operators while still boosting state revenue.
Maryland joins a growing list of states turning to sports betting tax reform as a way to stabilize post-pandemic budgets without launching entirely new industries.
What’s Next for Online Gambling in Maryland?
Although Maryland residents won’t see regulated online casinos launching in 2025, the conversation is far from over. Lawmakers are now more familiar with the legislative framework required, and interest remains strong from both operators and constituents.
If budget challenges persist — or if neighboring states like Pennsylvania or West Virginia expand their online gambling footprint further — Maryland could revisit iCasino legislation in future sessions.
At the same time, the crackdown on sweepstakes casinos might pave the way for fully regulated iGaming platforms that offer safer alternatives and generate tax revenue for the state.
